1. Honda's Financial services business conducts business under highly competitive conditions in an industry
with inherent risks
Honda's Financial services business offers various financing plans to its customers designed to
increase the opportunity for sales of its products and to generate financing income. However,
customers can also obtain financing for the lease or purchase of Honda's products through a variety
of other sources that compete with our financing services, including commercial banks and finance
and leasing companies. The financial services offered by us also involve credit risk as well as risks
relating to lease residual values, cost of capital and access to funding. Competition for customers
and/or these risks may affect Honda's results of operations in the future.